Lack of awareness and understanding of the financial services career path is a barrier to recruiting women and the next generation of advisers.

Our team at The Advisor Center is well-versed in the benefits of a career as a financial adviser or planner. We are often surprised by the number of those outside the industry who are unaware of what this industry has to offer in terms of job satisfaction, flexibility, growth and earning potential.

Case in point: I recently spoke with three college seniors, two males and a female, from three top universities — Notre Dame, Indiana University and the University of Wisconsin. All three were finance majors.

Excluding the players in the World Series, there are many contenders for a baseball list that no one wants to be a part of…..

The toughest question for the general manager of any baseball team is whether to pull the trigger and offer a player coming off a big year a huge contract. No matter what fans think there’s no way to tell for sure if a player will continue at the top of his game after re-signing. The World Series features two teams, the Kansas City Royals and the San Francisco Giants, who eschewed off-season splurges and relied on smaller contracts and young, untested, players — particularly the Royals.

A $150 million book of business Wells Fargo promised him never materialized — and then the wirehouse took him to arbitration…..

A wirehouse promises a veteran advisor a $150 million book of business and a $450,000-plus upfront bonus to come on over. The wirehouse resigns the FA’s job for him at his current firm, then e-mails his clients to tell them he’s leaving.

This strange and unusual real-life scenario begins to boarder on the bizarre when the book of business turns out to be only $10 million and five months after the advisor joins the firm, the wirehouse takes the vexed FA to arbitration by the Financial Industry Regulatory Authority (FINRA).

What can you tell me about yourself?

“Perhaps the oldest job interview question, but it’s still the most powerful. While prior measured accomplishments are the best predictor for future success, this open-ended question separates the great FA from the merely good FA. A good response gives me a glimpse of the candidate’s poise and communication skills. I want to learn about their work ethic, vision, passion, family, humility, community involvement, goals, stability, etc. The best response includes language about serving clients. The worst response is non-communication, uncomfortable silence, folded-arms, and defensiveness.”

The question isn’t whether or not FINRA and the SEC will require financial advisors to disclose the details of their compensation packages when they switch firms. The big question isn’t, “What will my clients think if they know how much money I’m earning to move my book of business?” Similarly, spending your time wondering what the maximum compensation you can receive as a recruitment bonus -without having to disclose it- is frankly, a waste of time.

Those questions are soon going to be an exercise in futility, as all indications are that the days of enhanced compensation, big bonuses and upfront cash to attract top producers may be going the way of the dinosaurs.
As such, the only question on any FA’s mind should be “When is this coming, and should I make a change now before the big deals dry up?” Because it’s not a question of whether or not the big recruitment deals are going to lose steam, it’s just a matter of how quickly they will begin drying up.
The reasons are varied and go beyond any new disclosure rules, and the wirehouses are publicly speaking up about their difficulties fulfilling the massive compensation packages they guaranteed. Make no mistake, for the past couple of years even the powerhouse firms have faced an uphill battle to keep their extravagant promises. That means that the 300%+ deals (and closer to 400% if deferred comp is matched) days’ are probably numbered. The 150% upfront cash proposals are not likely to survive the change. The days of buying FA’s out of their current contracts are simply no longer feasible.

The major factor that has driven deals up to their current exalted levels is the intense competition for a shrinking talented advisor population. Supply and demand has always ruled. But here’s the spoiler alert: these days it doesn’t look like we are very far off from the major wirehouse firms making a pact of sorts, to cap the recruitment deals. Recruiting has proven to be incredibly expensive for all of the players involved.
The major firms do in fact speak to each other, as evidenced by the Broker Protocol Agreement (2004) designed to stop the legal battles and temporary restraining orders that ensued when brokers jumped to a new firm. Prior to this agreement, the legal bills from all sides were, if you recall, ridiculous.

Although mergers, acquisitions, and the fickle nature of the industry had, at one point led many of the big players to offer attractive retention packages, these days it looks as if those may be going by the wayside as well. Brokerages seem to not only be tired of chasing one another’s top producers, they are tired of having to pay hefty retention fees, and recent statistics show that they aren’t necessary any longer. Turnover is down at all of the wirehouse firms.

At first glance this apathy towards retention and recruitment might look like it would lead to more turnover. Yet, there isn’t likely to be as much incentive to switch firms, if the monetary incentives just don’t exist anymore.
Please understand that recruitment deals will never entirely go away, but it’s today’s top deals that will be challenged. Whether the big deals start to dry up in 2014, or 2015, is anyone’s guess. But rest assured, they are poised to decrease over the coming months and years.
So if you’re an FA looking for a big recruitment bonus, it’s best that you make a move sooner than later. Because things are about to change, and the clock has already started ticking…with big recruitment deals living on borrowed time.

Michael Wasserman & Associates is Ready to Help
“Accept nothing but the best… and you’ll get it!”

If you are a financial advisor, building your brand is critical to your future, especially if you are an independent advisor, Shirl Penney of OnWallStreet.com says.

So what does it mean to have a brand? Penney describes it as the “embodiment of your reputation, the overall emotive response when clients and prospects hear or see the name of your firm.”

In order to establish your brand, it is recommended that you do a variety of efforts, such as promotional effort s and the use of social media. Penney recommends hiring marketing and PR professionals to get your company’s name out there, and help your brand.

One of the branding efforts you can do is writing articles about topics your current clients, as well as potential clients, may be interested in. You can also participate in interviews in the media that could help promote your brand. And social media and a good web site are also important.

In all, you only get one chance to make a good first impression. Make sure that your brand is something customers will like.

Some sports fans laughed when controversial former NFL Terrell (T.O.) Owens recently said he was broke. But it turns out it wasn’t all his fault. OnWallStreet.com reports that the Financial Industry Regulatory Authority has banned Jeffrey Rubin, Owens’ financial advisor, from working in the securities industry anymore.

Owens and at least 30 other NFL players invested in an “Alabama casino project that went bankrupt,” the news site reports. This dubious deal lost $40 million of the players’ money, and Owens sued Rubin earlier in the year. Michael Simon, T.O.’s attorney, said that Rubin failed to tell Owens that the electronic bingo machines that were to be used at the casino were illegal in the state. “It should have never been promoted to any NFL player or any investor,” he said. “It was illegal.”

FINRA said that one of the advisor’s clients lost $3 million on it, although the agency did not specifically say who had invested in it. But OnWallStreet.com says that Jevon Kearse, the ex-Philadelphia Eagles player known as “The Freak,” also invested in the project.

“This case demonstrates how broker misconduct can target high-income, inexperienced, and vulnerable investors,” Brad Bennett, who serves as FINRA’s enforcement chief, said in a statement on the issue. “Jeffrey Rubin took advantage of professional athletes who placed their trust in him.”

The article says that Rubin has agreed to the securities ban, but has not admitted to the allegations.

According to a new survey, millionaires’ confidence in the economy dropped considerably in February. OnWallStreet.com reports that the Spectrem Group, a research firm, revealed that millionaires who had $1 million or more in investable assets had their investment outlook drop 10 points in February, reaching the number 1, according to the Spectrem Affluent Investor Confidence Index. Those with $500,000 or more in investable assets dropped their investment outlook three points, going down to -7.

George Walper, Jr., president of the company, said that “The level of Millionaire investors who indicated they planned to stay on the sidelines and not invest was at its highest since September 2011.”

The company conducts 250 interviews a month “with financial decision-makers who have more than $500,000 of investable assets,” OnWallStreet.com says. The interviews range from bullish to neutral to bearish. A rating of 11 to 51 is bullish, 10 to -10 neutral, and -11 to -51 bearish.

OnWallStreet.com says that what investors expected their household income to be in the future dropped to -9.51, the lowest in nearly four years. Faith in the economy also dropped, to -6.95.